Select

Markets plunge, Dow enters correction territory

Posted on Sunday, February 11, 2018 by Tina Ray

Stock markets were routed around the globe

Torsten Slok, chief worldwide economist at Deutsche Bank, told the Financial Times: "Markets are coming to the conclusion that the USA economy is close to overheating and therefore that the risks of inflation are bigger than the risks of a recession".

The Dow Jones Industrial Average fell more than 1,000 points Thursday, entering correction territory after falling more than 10 percent from record highs two weeks ago, according to The Wall Street Journal. After numerous turns higher and lower, it wound up with a gain, coincidentally, of 567.

But the declines have led to questions for President Donald Trump, who had repeatedly boasted of the market's rapid rise in value previous year. Those including technology companies, banks, and retailers and travel companies and homebuilders.

The market's pullback came amid concerns about rising bond yields and higher inflation. But both Democratic liberals and GOP tea party forces were fighting the plan, raising questions about its chances just a day before the latest government shutdown deadline.

The yield on the 10-year Treasury bond ticked higher again on Thursday morning, to 2.88%. The S&P 500 also dropped 100 points, or 3.75 percent. The Nasdaq Composite was down 274 points, or 3.9%, at 6,777.

"The market has undergone a psychological change", says Doug Ramsey, chief investment officer at The Leuthold Group in Minneapolis. That's less than the 10 percent seen as a correction. The markets have heated up in the past year, and some saw yesterday's downturn as a needed correction. "There was euphoria because there hadn't been a pullback", said Jeffrey Schulze, investment strategist at ClearBridge Investments. On Thursday, the bank's leader said British regulators may have to ease off of the economic stimulus faster than expected. "People will be afraid now of shorting volatility".

Some investors fear the market is over-stretched in the context of higher inflation and rising bond yields as central banks withdraw their easy money policies of recent years. Those include worries about a potential rise in US inflation or interest rates and budget deficits in Washington.

New York Federal Reserve President Bill Dudley told Bloomberg News on Thursday that if the US economy keeps getting stronger the central bank may be justified in raising rates four times this year. They also experienced corrections. We haven't had inflation, and now we have it and everyone freaks out.

Travel bookings site TripAdvisor was one of only two S&P 500 companies that finished higher on Monday. His promises for big corporate tax cuts helped lift the Dow more than 8,000 points, though it has since given back about a quarter of that surge.

Oil prices also weighed on the index, with benchmark USA crude down 1.3 per cent to $63.33 per barrel.

Wholesale gasoline dropped 4 cents to $1.81 a gallon.

Brent crude, used to price global oils, lost 47 cents to $64.34 in London.

Popular news

Apple's TV app adds live news from CBS, CNN and others
You'll even be able to control the content with your voice using Siri on the Apple TV by saying things like "Play Fox News ". There will be a medal tracker and morning roundups so you can easily catch up with what you've missed overnight.Saturday, February 10, 2018

National Pizza Day deals in the Lowcountry
National Pizza Day is Friday, February 9th and some businesses are celebrating by having deals for their customers. Papa John's - Among other deals, get 25 percent off when you create your own deal with regular-priced menu items.Saturday, February 10, 2018

Democrats, Republicans criticize Trump's call for military parade
City Council - which is dominated by Democrats - mocked the idea of the city hosting a parade featuring military hardware. Trump acts more like dictator than president. "We have a Napoleon in the making here", said Congresswoman Jackie Speier.Saturday, February 10, 2018